Q: I have read your skeptical remarks about asset allocation, and would like to share the aggressive investment approach recommended by my broker, which involves the use of index funds. I put 50 percent into large-cap equity funds, 20 percent into small-cap equity and 25 percent into international, while keeping 5 percent in cash. Would you say that this is properly scientific?

A: The one thing I can say for certain is that it is pretty well-diversified. You don't include bonds, but that's to be expected if you are willing to accept the risks of an aggressive investment strategy.

That said, I have to wonder how your broker arrived at the 50-20-25-5 allocation formula. Why not 40-25-30-5, or 55-25-15-5 or 35-30-30-5? I picked those combinations out of thin air, but tell me why any or all of them aren't as good as 50-20-25-5.

To allocate assets properly, one would have to know in advance how well each class of stocks will perform. With all due respect, I don't think your broker has that knowledge. If he did, his recommended allocations would be 100 percent for the best and zero for the rest.

I can't resist the notion that any attempt at asset allocation is mostly arbitrary.

Q: I have three traditional IRAs. I am now 65 years old, and want to know how to take the minimum withdrawals when I reach age 70 1/2. Do I have to take them from all three IRAs at the same time, or can I take from just one account at a time? I keep reading conflicting information.

Your confusion may stem from the fact that you must consider each IRA separately when calculating the amount of the required distribution from each. Required distributions are based on your life expectancy, but can vary somewhat, depending on whom you designate as the IRA beneficiary.

To determine a given year's minimum distribution, you would add together the required distributions from each IRA, based on your account balances at the end of business on Dec. 31 of the previous year. It's then up to you whether to take the distribution out of a single IRA or some combination of IRAs.

Calculate carefully, because if you fail to take at least the minimum distribution, you can be hit with a whopping 50 percent penalty tax on the amount that should have been distributed but wasn't.

For further details, see IRS Publication 590, Individual Retirement Arrangements.

Q: Like many renters in the Bay Area, I thought the rise in home prices in recent years meant that I would never be able to buy. But now that prices are declining, there seem to be a huge number of houses on the market, and sales even at reduced prices are sluggish or non-existent. Is this the time to buy?

A: I wouldn't dare offer a one-word answer to that question. However, it appears that the real estate bubble could lose more air.

In many Bay Area communities, prices have fallen to where they were nearly two years ago. However, to get back down to the long-term trend line, they would need to fall considerably more, perhaps as much as 10 or 15 percent.

I wouldn't push anyone to buy at current levels. If you buy a house with a 20 percent down payment, and the house's market value then falls 10 percent, you will lose half your investment. That's comparable to what happened when the stock bubble burst in 2000-02.

Many sellers seem to be in denial, pricing their houses as though the market were still at the top. They remind me of the Nasdaq diehards who refused to believe that their market was collapsing, and stuck with Cisco Systems stock all the way from $80 to $9.

If you want to dip a toe in today's housing market, don't be self-conscious about offering 10 or 15 percent below the asking prices. You need to protect yourself.